Budget 2017: Insurance Sector Reaction

Here’s a round up of the reactions from the insurance and finance sectors to the Chancellor’s Budget Statement earlier today;

There’s £400 million for electric car research and a more substantial £2.5 billion for tech businesses, helping them `grow to scale.’ The driverless car project, showcased by DRIVEN last week also receives extra cash and everyone involved in the Driven/Oxbotica trial is naturally pleased about the government’s ongoing financial commitment to a driverless future – insurers should take note of that.

CAMPAIGNS WORK – ABI AND OTHERS HAVE HALTED THE IPT GRAVY TRAIN

The big news? Undoubtedly the freezing of Insurance Premium Tax, which was universally welcomed – with a sigh of relief – across the UK insurance industry. A high profile ABI campaign obviously had an impact as the message that doing the responsible thing in everyday life should not result in being taxed even more.

Apart from motorists, landlords, mortgage holders, small business owners and many more people MUST have public liabilty, life cover, or buildings insurance protection to run their business. Although there was a polite silence from many leading players in the motor insurance sector, others went public with their satisfaction that common sense seems to have prevailed;

The Association of Medical Insurance Intermediaries said,

“We are pleased our voice is being heard,”

“We are pleased the Chancelleor has listened, but we need to keep up the pressure to protect customers from future increases.” added the ABI, whilst broker Hodgson Insurance tweeted, `Great news!’

Meanwhile Andrew Jepp from Zurich Munipal wanted more long term certainty for the poublic sector bodies managing buildings, vehicle fleets and paying public liability on events;

“The Chancellor’s decision to freeze Insurance Premium Tax (IPT) is welcome. An increase in this ‘tax on responsibility’ would have put additional pressures on local authority budgets already stretched by years of spending cuts. We are calling on the Government to take this decision forward by committing to a review of IPT to give responsible citizens and public services paying premiums greater certainty.”

“The Digital economy position paper does not look like it is aimed at those selling insurance online through traditional models. For those looking at more innovative insurance solutions, such as those looking to match the risk carriers with customers through an online market platform, they might be under the scope of the paper.”

“The Capital Gains tax rule change will affect companies, but particularly the Friendly Societies and life insurers who are currently subject to capital gains in their investment income and make use of indexation – as the allowance is frozen from January 2018, they will not get any future benefit from that relief any more; which will potentially increase their corporate tax in the future.”

What’s your reaction to the 2017 Budget; bit of a non-event, or sensible steps? Post a comment below.